Bitcoin miner Argo Blockchain plunges 53%

Bitcoin miner says share deal is over and warns of ‘cash flow negative’ near term future

Mining Rig                                 
Argos Blockchain has also offloaded more than 3,800 mining rigs for $5.6m – Photo: Shutterstock

Argo Blockchain’s stock fell by 53% on Monday, after the prominent Bitcoin miner announced that it would no longer proceed with plans to raise funds by selling shares.

Argo Blockchain cancels $24m fund raise

In September, the company revealed that it had entered into a non-binding agreement with an unnamed investor, who had committed to purchasing 87 million shares at £0.276 (£0.36) apiece. The agreement was intended to raise £24m ($27.6m). 

In a statement to shareholders, Argo said it “no longer believes that this subscription will be consummated under the previously announced terms”, and was “continuing to explore other financing opportunities”.

The company said it had working capital sufficient for its present requirements “for at least the next twelve months” but admitted that it could not give any assurance “that any definitive agreements will be signed”.

It added: “Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations.”

Miner’s stock falls 92% in 2022

The statement also revealed that the firm has offloaded some of its mining equipment in order to raise funds, including 3,843 new-in-box Bitmain S19J Pro machines for $5.6m. 

Argo has styled itself as the first crypto-friendly Bitcoin miner, having invested in solar, wind and hydroelectric power generation methods. 

Despite this, however, the company has suffered the same fate as other prominent cryptocurrency miners following the onset of the crypto winter and the Russian invasion of Ukraine. 

With the former having wiped $2trn off the value of the total cryptocurrency market and the latter having put unprecedented pressure on global energy markets, Argo’s stock has fallen by 92% since the start of the year. 

In order to maintain a positive cash flow the firm has started to sell its Bitcoin reserves. In June, it sold 637 BTC at an average price of $24,500. The proceeds were used “to fund operating expenses and growth capital, as well as to reduce obligations under a BTC-backed loan agreement with Galaxy Digital”.

As of 31 October at 15:30 (UTC), the company was trading down by 55% on the London Stock Exchange at 6.87p, having started the year at 90 pence. By 11:30 (EDT) the miner was trading down on NASDAQ by 53% at $0.92, having begun 2021 at $12.70.

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